Shared equity scheme to provide 3,500 homes in Newham

Newham Council plans to provide 3,500 homes for low-cost homeownership over the next 15 years.

The council-led shared equity scheme will involve Newham acquiring properties and offering tenants equity shares of around 25 per cent. Residents will be encouraged into the scheme with an initial rent-free period of three years. They will then be asked to pay a market rate on the share owned by Newham.

The council will buy some of the homes for the scheme on the open market, as well as using some of its own stock. Other homes will be provided through section 106 agreements.

The scheme will be aimed at people in housing need who are in work. Target groups will include social housing tenants and people in properties that are overcrowded or under occupied.

Newham's head of housing, Jackie Belton, said the initiative had been shaped in discussion with the Communities and Local Government department and the Council of Mortgage Lenders.

'We want to make it so that they can buy a share that's relatively small, so that it's still affordable,' she said. 'We do need some freedoms around capital receipts for this to work.'

The cost of an average home in the borough is more than £230,000. The average income is £27,000. Ms Belton said low-cost homeownership schemes were crucial to prevent the exodus of young people in the borough to cheaper areas. The scheme is expected to get off the ground next April, subject to approval by councillors next month.